Africa's Role in a Disintegrating Global Economy

The past week’s The Economist magazine front-page headline read, “The New Economic Order.” After reading this front-page article, I was disappointed. Africa wasn’t even mentioned. The continent doesn’t count in the global economy. I reflected on the famous quote, “If you are not at the table, then you’re probably on the menu.” Nonetheless, the article provides a serious analysis of the future of trade. Globalization, which fostered greater economic integration and relative prosperity, is faltering.

Two days after The Economist came out, the US intensified de-globalisation by imposing 100% tariffs on Chinese electric vehicle imports. It is likely to impose more tariffs on other Chinese goods. Further, the US uses its veto powers at the World Trade Organization (WTO) to disable the organization from arbitrating trade disputes. Reuters reported in March that the European Union (EU) is also investigating whether to impose a 55% tariff on Chinese electric vehicles, but manufacturers in Germany are ambivalent since China is their biggest market.

How does Africa move from being on the menu to having a seat at the table? In other words, how will Africa intentionally become relevant in a disintegrating global economy? In the past, the continent failed, and as a result, globalization— the process of increasing economic, social, and cultural interdependence across the world— largely brought negative effects. The continent was exposed to greater risks and vulnerabilities, such as unfair trade practices, environmental degradation, external shocks, and cultural erosion. Many African countries have faced the dumping of cheap and subsidized products from developed countries, which has undermined their local industries and farmers. The hopes of structural changes dissipated.

Moreover, globalization has increased the dependence of African countries on foreign aid, debt, and remittances, which limit their policy space and sovereignty. Due to the influence of global media, consumerism, and westernization on many African societies, globalization has also posed a threat to their cultural identity and values. As a result, the structural weaknesses and fragilities of many African economies have been exposed, which rely heavily on primary commodities and have low levels of industrialization and value addition. Globalization has also increased the competition and pressure from emerging economies, such as China and India, which offer cheaper and better-quality products and services.

Globalization came with significant challenges to Africa's structural change. It is responsible for the erosion of cultural identity and values, which are crucial for social cohesion, innovation, and development. Global media, consumerism, and Westernization have influenced Africans' preferences, leading to dissatisfaction and a sense of inferiority. This has also undermined local production systems, knowledge, and skills, as many African countries lost their indigenous technologies and industries. Additionally, globalization affected political and economic choices, leading to neoliberal policies that prioritized market liberalization and deregulation over public investment and social protection. Globalization has also contributed to the loss of biodiversity, deforestation, climate change, and pollution, threatening the livelihoods and health of millions of Africans. These indiscretions have led to catastrophic floods, droughts and fires.?

Even with this glaring evidence, some economists argue that globalization also enabled African countries to access new markets, technologies, and investments, as well as diversify their exports and reduction of poverty. However, in my view, these were modest changes. According to the World Bank, the share of African countries in global trade increased from 2.2% in 2000 to 3.4 % in 2018, while the proportion of people living in extreme poverty declined from 54% to 41% over the same period. It is also said that globalization facilitated the spread of democracy, human rights, and education in many parts of the continent.

In contrast, globalization stimulated economic growth, trade, and integration in Southeast Asian countries, which have been among the most dynamic and successful in the world. According to the World Bank, the gross domestic product (GDP) per capita of Southeast Asia increased from $857 in 2000 to $3,759 in 2018, while the share of the region in global trade rose from 5.2% to 6.7% over the same period. Globalization has also contributed to the development of human capital, infrastructure, and innovation in Southeast Asia, as well as to the improvement of social indicators, such as health, education, and gender equality. Moreover, globalization has promoted regional cooperation and dialogue among the Southeast Asian countries, which have formed the Association of Southeast Asian Nations (ASEAN), a political and economic bloc that aims to enhance peace, security, and prosperity in the area.

Given the mixed and uneven impacts of globalization on different regions and countries, especially in Africa, it is important to consider the alternatives and options for the future. The option for Africa is to intensify integration into a single market under the African Continental Free Trade Area (AfCFTA), which was launched in 2018 and entered into force in 2019. The AfCFTA aims to create a pan-African market of 1.3 billion people and a combined GDP of $3.4 trillion by eliminating tariffs and non-tariff barriers, harmonizing standards and regulations, facilitating trade and investment, and enhancing cooperation and coordination among the 54 African countries that have signed the agreement. The AfCFTA has the potential to boost intra-African trade, diversify exports, increase industrialization, stimulate innovation, and generate employment and income. It can also foster regional integration, peace, and security, as well as strengthen the bargaining power and voice of Africa in the global arena.

However, the AfCFTA also faces significant challenges and obstacles that need to be overcome to realise its full potential. Some of the main challenges include the lack of infrastructure, connectivity, and financial resources; the persistence of protectionism, nationalism, and political instability; the heterogeneity and diversity of the economies, cultures, and institutions of the continent; the resistance and opposition of some interest groups and stakeholders; and the external interference and influence of other global actors and forces. To address these challenges, it is essential to adopt a holistic and inclusive approach that involves all relevant actors and sectors, such as governments, businesses, academia, and media. It is also crucial to ensure that the benefits and costs of the AfCFTA are equitably shared and distributed among the countries and regions, as well as among the different segments and groups of the population, particularly the poor, women, youth, and marginalised. As the English playwright, John Heywood's once said, “Rome wasn't built in a day, but they were laying bricks every hour.”

Africa must embrace technology to foster structural transformation by enhancing the productivity and competitiveness of its agricultural sector, which employs most of its workforce and contributes significantly to its GDP. Young people in a few countries are already enabling farmers to access timely and accurate information on weather, market prices, inputs, and best practices, as well as to connect with buyers, suppliers, and service providers. This must be scaled up across the continent to facilitate the adoption of innovative and sustainable farming techniques, such as precision agriculture, irrigation, and soil management, which can improve crop yields and quality, reduce costs and risks, and conserve natural resources. Furthermore, technology can support the diversification and value addition of agricultural products, such as processing, packaging, and branding, which can increase their value and demand in local and global markets. By using technology to modernise and transform agriculture, Africa can create more employment opportunities, generate more income, and enhance its food security and sovereignty.

Africa MUST enhance its cultural heritage by utilizing low-resource language models (LLMs) for local languages. These machine learning algorithms can generate, analyse, translate, and understand natural language texts, especially those with limited resources. They can preserve and revitalise Africa's linguistic and cultural diversity, which is one of the richest and most endangered in the world. LLMs can also facilitate communication, empower Africans to express their identities and contribute to global knowledge.

To move from being on the menu to having a seat at the table, Africa must leverage initiatives like the African Continental Free Trade Area (AfCFTA) and embrace technology to drive structural transformation. Addressing the challenges posed by globalization requires a holistic and inclusive approach involving all sectors and stakeholders. By modernising agriculture, enhancing cultural heritage through technology, and ensuring equitable benefits from economic integration, Africa can position itself as a significant player in the global economy.